Shun & Chiu
[2024] FedCFamC1A 104
•3 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Shun & Chiu [2024] FedCFamC1A 104
Appeal from: Chiu & Shun (No 2) [2024] FedCFamC1F 167 Appeal number: NAA 88 of 2024 File number: SYC 8033 of 2015 Judgment of: ALDRIDGE, JARRETT & CAMPTON JJ Date of judgment: 3 July 2024 Catchwords: FAMILY LAW – APPEAL – Appeal from orders dismissing claims for property settlement and spousal maintenance – Where no ground of appeal challenges the primary judge’s finding as to property ownership – Where the appellant agreed with values of the properties at trial that he then challenged on appeal – Where the appellant failed to challenge various liabilities that he then sought to challenge on appeal – No error identified – Appeal dismissed – Appellant to pay the respondent’s costs. Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Div 7.1.5
Limitation Act 1969 (NSW) ss 14, 54
Cases cited: Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35
Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12
Number of paragraphs: 26 Date of hearing: 24 June 2024 Place: Sydney Counsel for the Appellant: Ms Cohen Solicitor for the Appellant: Westlink Legal Counsel for the Respondent: Mr Bell Solicitor for the Respondent: Dong & Partners ORDERS
NAA 88 of 2024
SYC 8033 of 2015FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR SHUN
Appellant
AND: MS CHIU
Respondent
ORDER MADE BY:
ALDRIDGE, JARRETT & CAMPTON JJ
DATE OF ORDER:
3 JULY 2024
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The appellant pay the respondent’s costs fixed in the sum of $29,401.78 within 28 days.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Shun & Chiu has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE, JARRETT & CAMPTON JJ:
INTRODUCTION
This is an appeal from orders made by a judge of the Federal Circuit and Family Court of Australia (Division 1) on 18 March 2024, dismissing the appellant husband’s claims for property settlement and spousal maintenance and the respondent wife’s Response, which also sought orders for a division of property.
The primary judge found that the parties held assets with a value of $2,669,500 but were burdened by debts of $3,205,798.64. Taking into account the superannuation entitlements, there was a shortfall of $403,880 of assets over liabilities.
The major difficulty identified by the primary judge was that the three properties which were the subject of the hearing were owned by the wife. They had a total value of $2,665,000, which was almost the entirety of the assets available for division. The third-party mortgages over those properties gave rise to a liability of $2,307,501. That was not all. In addition, his Honour found that the wife owed a further $840,610 to friends and family members.
This led to the following findings:
176.Having carefully considered all the evidence and arguments, I am not satisfied it would be appropriate, just and equitable to make any order altering the property interests of the parties in this case. The wife’s application and the husband’s response should simply be dismissed. This will result in the wife retaining all her property and liabilities. The husband will retain his superannuation. In reaching this conclusion, I have taken account of all the matters discussed in the course of these reasons, including the modest property pool, the fact that the husband may have contributed more cash to the purchase of Suburb D, but the wife shouldered the mortgage debt, certainly after separation. The wife will be left with a substantial deficit of assets over liabilities, but there is no property identified by her from which this could be addressed, even if I was persuaded any adjustment in her favour was warranted, which I am not. Her claim to a superannuation split would not assist in this regard anyway and the husband is considerably older than her making superannuation relatively more important to him.
Oddly enough, no ground of appeal challenges this finding. Such a failure is a significant impediment to the success of the appeal. Whilst success of some of the grounds that exist could provide the basis for a challenge to that finding, how that link might be established was not explained in the appellant’s Summary of Argument.
However, even ignoring that difficulty, we were unable to discern any merit in any of the grounds for the reasons which follow. The appeal will be dismissed.
THE APPEAL
Did the primary judge err in his finding as to the value of the wife’s properties? (Grounds 1–3)
His Honour took the value of the properties from a joint balance sheet tendered by the parties. The values given by the parties for each of the properties were the same.
On appeal, the husband submitted that the primary judge should have looked further than the values listed because the husband’s entries as to these three properties were each marked with an asterisk. This, in turn, led to a note which read:
Respondent Husband says the property valuations were made in November 2020, the values of the properties during the COVID19 period was significantly lower than the current market. The current prices were referenced from as the following:
$260,000 for [Suburb D]
$800,000 for [Suburb M]
$400,000 for Vic.
(Exhibit 18, p.4)
We agree with counsel for the husband that the entry for the Suburb D property was an error (given the value shown in the balance sheet is $1,640,000) but cannot agree that what was intended as the correct value can easily be inferred.
It is impossible to give the note any weight because the husband did not attempt to introduce the searches identified in the note into evidence. Had he done so, the attempt would have almost certainly failed. This is because such evidence falls short of the requirements of Div 7.1.5 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) as well as general principles (Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705).
We reject entirely that the absence of evidence as to the current value of the properties required the primary judge to adjourn the hearing and require the parties to appoint a single expert. No such application was made either at a directions hearing or at the final hearing. It is now, on appeal, too late to do so. There is no reason whatsoever why either of the parties could not have sought to adduce appropriate valuation evidence.
In any event, the grounds are entirely misconceived. In the course of submissions at the final hearing, counsel for the husband expressly agreed with the values for the three properties identified in the balance sheet (Transcript 27 November 2023, p.361 line 36). The value was thus agreed and the husband cannot now contend otherwise.
Should the primary judge have adopted an asset-by-asset approach when dividing the property? (Ground 4)
The question of whether a global approach or an asset-by-asset approach should have been adopted did not arise because his Honour determined that it was not just and equitable to divide the property.
The point remains entirely hypothetical, and we do not need to take it further. We would add, however, that a throw away line by counsel – “But we would argue that it has to be dealt with under the principle of assets by assets” (Transcript 27 November 2023, p.371 lines 16–17) – is not sufficient to require a serious discussion of that issue in a trial judge’s reasons.
Did the primary judge err in including liabilities referable to the continuing maintenance of the wife’s properties? (Ground 5).
The primary judge accepted as relevant liabilities overdue council, water, electricity and strata rates owed by the wife for each of the three properties. This was said to be in error because:
5.2.Having made no allowance in the addbacks for rental received by the wife it was the wife’s responsibility to maintain those properties which were held in her name, occupied by her or tenanted by tenants who paid her rent. This is particularly having regard to the fact that the wife was claiming as a debt, and was allowed as a debt:
Loan from Wife’s parents $653,503
Loan from [Ms Y] $54,535
Loan from [Ms Z] $132,572
(Appellant’s Summary of Argument filed 27 May 2024)
We do not understand the point sought to be made. There was no dispute that these debts were owed. It cannot be assumed that the rent received was sufficient to meet the outgoings.
The only dispute raised in the notes to the balance sheet was a reference to a large credit card debt owed by the wife (which did not appear in the balance sheet). There was therefore no need for the primary judge to look at any issue of the wife improperly diverting rent away from the payment of proper expenses so as to inflate her liabilities at the hearing (which seems to be the basis of the husband’s present submission).
The husband did briefly submit that “the applicant decided to raise money by personal loans; not paying the rates” (Transcript 27 November 2023, p.371 lines 23–24), but that was in the context of the submission that these were decisions made by the wife alone in relation to her assets. That did not prevent them from being found to be genuine liabilities (at [116]).
No error on the part of the primary judge has been identified.
Grounds 6 and 7
It is not necessary to consider Grounds 6 and 7 as no separate argument was addressed to them. The husband relied on the submissions under Grounds 1–5. They have failed and so too will these grounds.
Did the primary judge err in allowing the wife’s loans from friends and family members as liabilities? (Grounds 8–10)
These grounds challenge, in turn, the inclusion of loans owed to the wife’s friends and family members because:
(a)The loans were made post-separation;
(b)There was no evidence as to the “destination” of these loans;
(c)The loans did not relate to assets of the marriage; and
(d)In the case of the advance from Mr SS and Ms AA, recovery was barred under s 14(1)(a) of the LimitationAct 1969 (NSW) (“Limitation Act”).
His Honour’s findings were:
113.Item 32 is claimed by the wife as a liability owed to her parents of $653,503. The wife claimed to have had a conversation with her mother in or around April 2012 wherein her mother expressed that now she was married any money provided to her from the parents would need to be repaid (Wife’s affidavit filed 1 May 2023, paragraph 40). The wife’s mother, Ms AA provided an affidavit filed 1 May 2023 and was cross-examined. The mother set out a schedule purportedly representing loans amounting to $653,503. Her evidence that the money provided was a loan was not challenged in cross-examination. The wife tendered a number of receipts of ATM withdrawals that correspond with the dates and amounts recorded in her affidavit and the affidavit of her mother. There are numerous electronic transfers labelled as loans from the wife’s mother or father to the wife.
114.Item 33 is a liability claimed by the wife to be owed to her friend Ms Y in the amount of $54,535. Ms Y swore an affidavit in the proceedings and was cross-examined. The husband’s legal representative accepted that the transactions as claimed by Ms Y were corroborated with the exception of a transfer of $1000. It was not put to Ms Y during cross-examination that the money transferred was not intended as a loan.
115.The wife also sought to include a liability to her cousin Ms Z in the amount of $132,572 (Item 34). Ms Z claimed to have provided $132,572 to the wife, by way of 10 electronic transfers between 10 March 2017 and 19 August 2019. Annexed to Ms Z’s affidavit filed 1 May 2023 were five documents entitled “Application for Funds Transfers (Overseas)” purportedly evidencing the transfer of $79,610 from Ms Z to the wife’s account. Ms Z was cross-examined on the absence of the transaction records for the remaining $51,962 and she explained she did not keep evidence of all of the transactions as they had occurred a long time ago, however she believed the transactions could be seen from her and the wife’s account (Transcript 10 May 2023, p.129 lines 32–39). It was not put to Ms Z during cross-examination that the money was not transferred or that it was not intended to be a loan. The wife provided bank statements which appear to corroborate the receipt of the 10 bank transfers (Exhibit 5, p.1482–1509). The wife contended the money was loaned to assist her during the family law proceedings and on the understanding that it would be repaid at their conclusion.
116.It was the wife’s case that the loans she received from family and friends were applied to mortgages repayments, strata levies and other associated costs of the properties, medical expenses and living expenses. I accept Items 32, 33 and 34 are genuine liabilities of the wife.
His Honour, therefore, did take into account that the advances were made after separation and identified the destination of those funds. These destinations included mortgage payments, strata levies and other costs of the properties. The husband did not attempt to show these findings were erroneous.
Counsel accepted that the Limitation Act point was not raised at the hearing. Had it been raised, there is the real possibility that further evidence could have been called to meet it (for example to show a confirmation of the debt under s 54 of that Act). Therefore, the point cannot be raised now (Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; Metwally v University of Wollongong (1985) 60 ALR 68 at 71; Water Board v Moustakas (1988) 180 CLR 491 at 497).
These grounds do not succeed. The appeal will be dismissed.
COSTS
Counsel for the husband very properly conceded that if the appeal was to be dismissed, it would be just to make an order for costs. No issue was taken with the amount claimed. The husband will pay the wife’s costs fixed in the sum of $29,401.78.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldridge, Jarrett & Campton. Associate:
Dated: 3 July 2024
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